Chapter 18, Problem 18.5E

Issuance of shares; noncash consideration

• LO18–4

During its first year of operations, Eastern Data Links Corporation entered into the following transactions relating to shareholders’ equity. The articles of incorporation authorized the issue of 8 million common shares, $1 par per share, and 1 million preferred shares, $50 par per share.

Required:

Prepare the appropriate journal entries to record each transaction.

Feb. 12	Sold 2 million common shares, for $9 per share.
13	Issued 40,000 common shares to attorneys in exchange for legal services.
13	Sold 80,000 of its common shares and 4,000 preferred shares for a total of $945,000.
Nov. 15	Issued 380,000 of its common shares in exchange for equipment for which the cash price was known to be $3,688,000.